24th September 2016
Many of us grew up with certain ideas about retirement. Once you were the right age, you would collect your pension, and spend the rest of your days relaxing. The picture often includes few responsibilities, and a general life of leisure. Now, as news about old-age poverty and pension system shortfalls abound, rethinking the idea of retirement is wise.
News about the ageing population has grabbed headlines for years. Many baby boomers reached retirement age in 2012, joining the ranks of the pensioners across the country. More qualify for pensions every day.
Issues of sustainability are apparent to most analysts. The number of people entering the workforce is not replacing the number leaving it. This is coupled with longer life expectancies amongst the aged population. Cumulatively, this results in a shortfall which may be irrecoverable.
Since baby boomers were not raised with the idea that retirement may be a struggle, many are currently ill prepared for the demands. Some surveys found that outside of a pension, almost two-thirds of baby boomers only had savings in cash. Many were completely unaware of how to choose investments to generate income.
Some have not even begun to plan for retirement, even with knowing the state pension system will be insufficient. Some estimate that roughly 2 million baby boomers have no private pension wealth. Others describe their savings as highly inadequate based on their project needs. This lack of savings has even been cited as a primary financial regret by many within the generation.
With life expectancies increasing, it may be time to rethink the retirement paradigm. Instead of exiting the workforce at 65, and possibly be retired for another 20 years or more, should baby boomers continue to work? For many, this may be necessity.
By remaining in the workforce, many can avoid joining the ranks of the impoverished. It also provides more time for private investment to create a more secure retirement in the future.
But, the benefits aren’t solely financial. Remaining in the workforce can also help pensioners remain physically and mentally healthy. Working provides a built-in social activity, and can help keep people active. Some people find it difficult to imagine a life without working. In which case, remaining in the workforce may simply feel natural.
There is no rule saying that you must continue with the same kind of work as you grow older. If you don’t want to remain with your current employer, explore other options. Maybe working part time would suit your financial and personal needs. You may want to explore a different career field as well.
For those that enjoy their current profession, consider assuming a less strenuous role within the field. Focus on the aspect that you truly enjoy, and look for positions based on those activities.
Reaching the age of a pensioner does not mean your life has to hit the brakes. Consider all of the options available, and move towards a destination that will meet your needs and wants. Keep an open mind about what the next 10, 20, or 30 years of your life can look like, and act accordingly. You may find a middle ground that leaves you happier than